Facilities: Obstacle course

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The Intuit Dome, soon to be built in Los Angeles, is AECOM Hunt’s latest project to address these challenges. nba

As part of a major renovation of Camping World Stadium in Orlando, Len Moser was increasingly restless last spring while waiting for the plated doors he had ordered months earlier. Moser, vice president of general contractor Barton Malow, has gotten to the point of considering a trip to the Canadian offices of the door maker he left unnamed to make a personal plea for the product. The only problem: at the time, because of COVID, he could not travel to Canada.

Problems like this persist for sports venue construction projects 22 months after COVID first started in the United States.

The first of these three seems to be the most overwhelming. Supply chain issues are a concern for everyone in the industry, said Dale Koger, vice president and general manager of PCL Sports and Convention Centers at PCL Construction, and are driving shifts in product supply. and materials that could survive the pandemic.

“If you don’t have to put it on a boat,” Koger said last week, “there’s a good chance you’ll be getting close to it in time.”

The Associated General Contractors of America producer price indexes show a 141% increase in the price of steel mill products from November 2020 to November 2021. Lumber prices have seen a well-documented increase since the beginning. pandemic, and other basic building ingredients, like those critical for building insulation, have also jumped. Project forms, especially those completed a year or more ago, don’t match current costs, leading to some interesting conversations with clients, said Monte Thurmond, executive vice president of AECOM Hunt, responsible from the southern region.

“The conversations at the start of some of these [projects]”, he said,” are, ‘oh my god.’ “

According to the AGC, year-over-year increases in materials costs exceeded changes in average bid costs by around 20% in mid-2021, the biggest difference since the group began trading. follow the statistic in 2006. This was more than double the previous record. in 2010, when material costs increase, bidding costs increase by 10%. And yet, Turner Construction senior vice president Dewey Newton said customers continue to move forward despite the multi-faceted increases.

“In some cases,” he said, “we slow down or change the design and in others they are willing to accept it and that is part of doing business. “

Demand chain

Work can be sped up as a project’s deadline draws near, but, Moser said, “you can’t do anything without hardware. This must be the goal.

The term “supply chain” is an oversimplification of a multifaceted global network that has struggled to run smoothly from mid to late 2020. In the United States, the problem stems from part of the blocked ports. Craig Fuller, owner of multiple media outlets covering the transportation and supply chain industries, tweeted late last year: The ability to move volume, which compounds the problem.

Even as the United States resolves its issues in Long Beach, Seattle, and other key seaports, COVID closures around the world, especially in Southeast Asia, continue to hamper the production and movement of goods, in particular but not only electronic components. For example, the main bowl seats at Seattle’s Climate Pledge Arena have been delayed for three months by Malaysia due to a pandemic-related lockdown that has hampered production and export.

Like any channel, it may be impossible to get the widget that powers the widget in the widget, said Tab Baker, senior vice president of AECOM Hunt, who leads the company’s sports building efforts in the south. -Where is. He listed some of the specific materials and parts essential to building sports venues that are hard to come by: bar beams, metal decking, electrical switchgear components, even toiletries. Moser said fire alarm system amplifiers would typically take three weeks to get, but take around 30 weeks right now.

The Camping World Stadium has been renovated.getty pictures

Procurement is happening earlier on project schedule, according to Jack Wrightson, principal and director of AV systems designer WJHW. AECOM Hunt senior vice president Scott Blanchard said the entrepreneur is placing product orders for its Intuit dome project that are unlikely to be needed for two years. These pre-ordered products and materials have to be put away somewhere, resulting in storage needs and costs that were not previously there.

“We’re going to have to put things in storage sooner, or have the company store them for us at cost,” said Paula Portz, COO of Project Legends development. But, as Koger pointed out, warehousing costs less than not completing a project on time and paying damages.

Turner Construction does $ 15 billion worth of work each year and is one of the nation’s largest buyers of some of the heavy machinery and equipment that powers the stadiums. Turner has an in-house procurement team of 500 people called “Source Blue” and has thus largely avoided major procurement issues, but few companies have the resources or the size of one of the largest companies in the world. construction in the world.

“Customers want to know that we know where it is,” Newton said.

Ephesus Sports Lighting also benefits from the size and scope of its parent company, Signify. Mike Quijano, director of strategic marketing at Ephesus, said the company remained on the inventory it held when a series of sports venue projects shut down in 2020 and 2021, meaning it has the product that customers need when many competitors don’t.

“I’m just wondering how some of the smaller manufacturers could do that, do the inventory, plan and buy for six to 12 months,” Quijano said.

In some cases, there are workarounds. Concrete could be used at higher levels of a site instead of the usual steel, Koger said. Gary Birdsall, vice president of sports and convention centers at PCL Construction, said his company recently used old-fashioned crenellated beams instead of joists in room ceilings because, when it comes to beams, “The next nine months have already been bought. “

Opinions are divided on whether the pandemic will lead to a particular supply chain solution: a long-term repatriation of manufacturing to U.S. shores. Baker doesn’t think so and focuses on ordering early, leaving wiggle room in the project schedule in the event of a delay.

But the risk of delay for overseas products and equipment is too great for some to tolerate. Portz said Legends and its clients plan to use U.S. alternatives on current projects more often than in previous years. Because, for example, if “Italy stops you can’t get stone,” she said

Labor pains

The limited supply has helped drive up the prices of many basic building ingredients, like copper, and these effects spill over into critical materials like insulation or electronics. Newton said Turner Construction has experienced average price inflation of between 10% and 14% over the past 12 months, and that prices have risen 6% in the third quarter alone. This kind of increase usually occurs over the course of a year.

“You might have thought it was a good time to buy a job and it went completely the other way,” Thurmond said.

According to the Mortenson Cost Index, which assesses prices in a handful of the contractor’s largest U.S. markets, lumber prices in Chicago in the second quarter of 2021 were up 131 percent from 2019. While lumber prices have since declined slightly (still 89% higher than in 2019), prices for structural steel, reinforcing materials, steel pipes, ducts and PVC pipes were still up in the third quarter of 2021.

A widespread shortage of skilled labor increased the overall costs of the project, as wages and other benefits were increased to attract workers from the smaller talent pool. At one point in fall 2021, AECOM Hunt had five ongoing arena projects – the Oak View Group arenas in Austin, Coachella Valley, Savannah, and Long Island, and the Intuit Dome in Inglewood. The projects were spread across the country, but illustrated the industry’s need for skilled workers, a need that was increasingly difficult to meet.

Seats at the Climate Pledge Arena have been delayed for months.getty pictures

According to data from industry group AGC, job vacancies in the construction sector rose 62% from October 2020 to October 2021 as projects reopen. Thurmond said that AECOM Hunt has around 750 workers at the Moody Center jobsite in Austin, but it could use a few hundred more. This project competes for skilled workers with huge Samsung and Tesla production plants that are also under construction in Texas.

“The lack of federal funding for vocational and technical education makes it difficult for sectors like construction, manufacturing and shipping to find workers interested in these career paths,” said Stephen Sandherr, chief executive of the AGC, in December. “We’re doing everything we can to recruit people into high paying construction careers, but exposing more students to construction skills will definitely help. “

Creating their own talent pool has become a major initiative for many of the top entrepreneurs, especially those with a national presence.

“We’re really focused on developing the workforce,” Moser said. “You have to get people interested in our business. “

Turner has offices in 45 US cities and has developed workforce pathways through community programs. But it’s not easy to do overnight, especially for skilled workers and tradespeople like welders or electricians.

“Being in the community is number 1,” Newton said. “But you have to keep growing in this community, looking for resources, in some cases partnering with contractors or community members who are trying to get qualified people into the craft.”

Industry challenges all are in addition to more expensive projects. WJHW, for example, has seen a 15-20% increase in overall installation costs for systems projects. And it’s not clear, especially for projects like the Intuit Dome which only started recently, if cost relief is on the horizon.

Wrightson said: “It’s a murky crystal ball that we’re all looking at right now.”

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